As gas prices in B.C. soared above $2.30 per litre earlier this year, some Lower Mainland residents faced difficult tradeoffs. One Surrey resident named Sarah stopped saving for a down payment on a house so that she’d have extra money to pay for the gasoline she needed in order to get to work and buy groceries, according to a survey set up by Daily Hive Urbanized. Another local with mobility issues cut back on all non-essential activities: “I go nowhere. I stay at home.”
In Langley, a 35-year-old named Crystie stuck driving to work said the financial squeeze left her feeling “stressed, irritated, sick, depressed, hopeless and trapped.”
Does that mean that right-wing voices were correct when, one after another, they blamed climate emergency gas taxes for the hit drivers were taking? No. But you had to listen carefully to Canada’s media to know that.
As public anger intensified, politicians rushed to tap it for political gain. “These gas prices are absolutely eye-popping,” argued Pierre Poilievre, the front-runner for the leadership of the federal Conservative party. “Meanwhile, Liberals like [Justin] Trudeau and [Jean] Charest have done nothing but make them even more expensive with their ever-rising carbon tax. Axe the tax. Make more Canadian energy, now.”
A cavalcade of right-wing pundits and think tanks echoed this attack on federal climate policy. But the idea that carbon prices were the primary driver behind record-high gas prices is incorrect, according to experts like University of Calgary economics professor Trevor Tombe, who told CBC that “it’s really about global oil prices, and that’s really driven by things far beyond the Government of Canada’s control.”
Poilievre, who didn’t respond to a media request from The Tyee, neglected to make that corrective to his hundreds of thousands of social media followers.
Nor did he inform them that Canadian oil companies and their investors were earning “sky-high” profits from the gas prices he attacked.
But it’s true. As working people across the province and the country suffered, Canadian oil and gas companies, along with their shareholders, were doing fantastic. That’s the story contained in recent earnings reports from the top four oilsands producers, which together announced combined profits of over $12 billion for the second quarter of this year.
“Overall, the first half of 2022 delivered solid results, and we're positioned for an even stronger second half of the year,” gushed Alex Pourbaix, president and CEO of oilsands producer Cenovus, as his company announced $2.4 billion in earnings for the second quarter of this year.
“In the second quarter of 2022, Suncor reported the highest quarterly adjusted funds from operations in its history,” interim president and CEO Kris Smith said during an August earnings call as the company reported nearly $4 billion in net earnings. “And we returned record adjusted fund flow right back to our shareholders.”
Imperial Oil meanwhile reported net earnings of $2.4 billion, and CNRL reported $3.5 billion — numbers that were described as “truly eye watering” by Gerald Butts, a former top aide to Prime Minister Justin Trudeau.
‘Excessive scandalous profits’
As pundits, politicians, environmental organizations and industry groups debate the political implications of a wildly profitable oil and gas sector during an era of escalating inflation and climate disasters, one prominent progressive organizer in B.C. is urging people not to forget who ultimately made possible these record-setting earnings: the millions of Canadians who saw their bank accounts drain every time they filled up.
“Oil and gas companies been ravaging the pocketbooks of working-class people at the pump,” Avi Lewis, an associate professor of geography at the University of British Columbia and longtime climate activist, told The Tyee. “It is grotesque beyond the capacity of words to convey.”
No less than the United Nations secretary-general agrees with that analysis. “We are seeing excessive scandalous profits of the oil and gas industry in a moment in which all of us are losing money,” António Guterres said during an August press conference. “I urge people everywhere to send a clear message to the fossil fuel industry and their financiers that this grotesque greed is punishing the poorest and most vulnerable people, while destroying our only common home, the planet.”
The price that Canadians pay for gasoline had been rising for months as we entered 2022 due in part to more people wanting to travel after largely staying put during the pandemic. At the same time, oil companies had been cutting back production due to low oil prices, resulting in a tighter supply. And then came Russia’s invasion of Ukraine, which helped accelerate gas prices to unheard-of levels.
By June, nearly 70 per cent of Canadians were expressing fears that they wouldn’t be able to afford gasoline, according to an Ipsos poll conducted for Global News. People with children were especially worried.
Another survey suggested that a majority of people in the country — 54 per cent — were cutting back on their driving.
‘Robbed at the pump’
“It’s extremely stressful,” a 26-year-old Albertan named Amy told the Daily Hive Urbanized survey. “We do not have efficient or safe transit in my city, and with inflation, the cost of living is outrageous.” She added, “I limit my driving and basically can’t enjoy anything that’s not a necessity. Canadians and especially Albertans shouldn’t be robbed at the pump.”
And who was doing the robbing? Can it be a coincidence that the top four oil and gas companies in the country together saw their combined net earnings triple from the same period last year? That’s the calculation done by the organization Environmental Defence.
“What makes the profit margins of these companies so high?” asked David Detomasi, an associate professor of international business at Queen’s University and author of Profits and Power: Navigating the Politics and Geopolitics of Oil. “I think the big reason is that most of the companies reporting these outlandish profits are integrated companies. They do everything, from drilling for oil, to extracting it, to refining it, to transporting it, to selling it at a gas station. And they get really good profits all along that chain.”
Despite these profits representing a massive transfer of wealth from ordinary Canadians to the country’s largest oil and gas producers, there is little political will at the federal level to do anything about it.
Canada's Ministry of Finance is reportedly not considering any new taxes on excess profits from fossil fuel companies that could be returned to people through tax credits or social programs, as some federal opposition politicians have suggested.
Lewis argues the best option for people feeling “robbed” at the gas pump is to encourage their local municipalities to sue oil and gas companies for the floods, extreme weather and other climate damages caused by the ever-escalating climate emergency, the costs of which ultimately have to be covered by taxpayers.
The City of Vancouver, which experiences an estimated $50 million in such climate impacts every year, is now considering that type of litigation.
“People are getting walloped by the fossil fuel industry,” said Lewis, who is involved with a new campaign called Sue Big Oil. “We need to build the power to elect governments that will actually have the courage to get that money back.”